HomeMy Public PortalAboutEthics Comm Complaint folder01 Filing # 26894183 E -Filed 05/05/2015 12:00:14 PM
IN THE CIRCUIT COURT OF THE
FIFTEENTH JUDICIAL CIRCUIT, IN
AND FOR PALM BEACH COUNTY,
FLORIDA.
CASE NO. 2011CA017953XXXXIvIB
TOWN OF GULF STREAM,
VILLAGE OF TEQUESTA, CITY
OF RIVIERA BEACH, TOWN OF
JUPITER, TOWN OF PALM BEACH
SHORES, TOWN OF MANALAPAN,
TOWN OF MANGONIA PARK,
CITY OF PALM BEACH GARDENS,
TOWN OF HIGHLAND BEACH,
TOWN OF LAKE PARK, CITY OF
WEST PALM BEACH, TOWN OF
OCEAN RIDGE, and CITY OF BOCA
RATON, municipal corporations of the
State of Florida,
Plaintiffs/Appellants,
V.
PALM BEACH COUNTY, a political
subdivision,
Defendant/Appellee,
.,4
SHARON R. BOCK, in her Official
Capacity as the Clerk and Comptroller
of Palm Beach County, Florida,
Intervenor/Appellee.
NOTICE OF APPEARANCE
The clerk will please enter the appearance of the undersigned law firm as
I
additional counsel for Plaintiff/Appellant, City of West Palm Beach, for appellate
purposes only. Copies of documents and pleadings should be sent to the
undersigned at the address below.
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a copy of the foregoing has been e-mailed this
5th day of May, 2015, to:
PHILIP MUGAVERO
HELENE C. HVIZD
PALM BEACH COUNTY
ATTORNEY'S OFFICE
300 N. Dixie Highway, Suite 359
West Palm Beach, FL 33401
pmugaverApbcgov.org
hhvizdO,pbcgov.org
Counsel for Defendant/Appellee, Palm
Beach County
JOHN C. RANDOLPH
JONES, FOSTER, JOHNSON &
STUBBS, P.A.
505 S. Flagler Drive, Suite 1100
West Palm Beach, FL 33401
jrandolph(i�ionesfoster.corn
Counsel for Plaintiff/Appellant, Town of
Gulf Stream
01
HAMPTON C. PETERSON
PALM BEACH COUNTY CLERK &
COMPTROLLER SHARON R. BOCK
301 N. Olive Ave., 9`h Floor
West Palm Beach, FL 33401
hpeterson(a-)mypalmbeachclerk.com
Counsel for Intervenor/Appellee, Palm
Beach County Clerk & Comptroller
Sharon R. Bock
PAMALA HANNA RYAN,
CITY OF RIVIERA BEACH
ATTORNEY'S OFFICE
600 W. Blue Heron Blvd.
Riviera Beach, FL 33404-4311
pryan(a-)rivierabch.com
Counsel for Plaintiff/Appellant, City of
Riviera Beach
Im"MR15V mm
LOHMAN LAW GROUP, P.A.
601 Heritage Drive, Suite 232
Jupiter, FL 33458-2777
max(i4lohmanlawaroun.com
Counsel for Plaintiff/Appellant, City of
Palm Beach Gardens
KENNETH G. SPILLIAS
KENNETH G. SPILLIAS, P.A.
147 Gregory Road
West Palm Beach, FL 33405
kspilliasAoceanrideeflorida.com
Counsel for Plaintiff/Appellant, Town of
Ocean Ridge
GLEN J. TORCIVIA
TORCIVIA, DONLON, GODDEAU &
ANSAY, P.A.
701 Northpoint Pkwy., Suite 209
West Palm Beach, FL 33407
lg enAtorcivialaw.com
Counsel for Plaintiff/Appellant, Town of
Highland Beach
DOUGLAS N. YEARGIN
CITY OF WEST PALM BEACH
401 Clematis Street, 5th Floor
West Pahn Beach, FL 33401
dyear¢inna,wyb.org
Counsel for Plaintiff/Appellant, City of
West Pahn Beach
3
KEITH W. DAVIS
CORBETT, WHITE, DAVIS and
ASHTON, P.A.
1111 Hypoluxo Road, Suite 207
Lantana, FL 33462-4271
keithna,cwda-le al.com
Counsel for Plaintiffs/Appellants, Village
of Tequesta, Town of Palm Beach Shores,
Town of Manalapan and Town of
Mangonia Park
THOMAS JAY BAIRD
JONES, FOSTER, JOHNSON &
STUBBS, P.A.
4741 Military Trail, Suite 200
Jupiter, FL 33458-4842
tbairdna jonesfoster.com
Counsel for Plaintiffs/Appellants, Town
of Jupiter and Town of Lake Park
DIANA GRUB FRIESER,
CITY OF BOCA RATON
201 W. Pahnetto Park Road
Boca Raton, FL 33432-3730
dgfreisea,inyboca.us
Counsel for Plaintiff/Appellant, City of
Boca Raton
JANE KREUSLER-WALSH,
REBECCA MERCIER VARGAS and
STEPHANIE L. SERAFIN of
KREUSLER-WALSH, COMPIANI & VARGAS, P.A.
501 South Flagler Drive, Suite 503
West Palm Beach, FL 33401-5913
(561)659-5455
Primary: ianewalshAkwcvna.com
rvargasAkwcvna.com
sserafmAAkwcvna.com
Secondary: eservice(iWwcvna.com
Counsel for Plaintiff/Appellant, City of West Pahn
Beach
By: /s/ Jane Kreusler-Walsh
JANE KREUSLER-WALSH
Florida Bar No. 272371
REBECCA MERCIER VARGAS
Florida Bar No. 0150037
STEPHANIE L. SERAFIN
Florida Bar No. 58390
C!
IN THE CIRCUIT COURT OF THE FIFTEENTH JUDICIAL
CIRCUIT IN AND FOR PALM BEACH COUNTY, FLORIDA
CIVIL DIVISION
CASE NO.: 2011 CA 17953 AO
TOWN OF GULF STREAM, et al.,
Plaintiffs,
VS.
PALM BEACH COUNTY, a political
subdivision of the State of Florida,
Defendant.
SHARON R. BOCK, in her Official Capacity
as the Clerk and Comptroller of Palm Beach
County, Florida,
Intervenor.
FINAL JUDGMENT
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THIS CAUSE was before the Court for non jury trial on the Plaintiffs' ("the
Municipalities") Amended Complaint for Declaratory Relief ("Amended Complaint") filed on
July 30, 2013 against the Defendant, Palm Beach County ("the County"). The County filed its
Answer and Affirmative Defenses on August 28, 2013. Sharon Bock, Clerk and Comptroller of
Palm Beach County ("the Intervenor") filed a Motion to Intervene which was granted on
November 11, 2012. The Intervenor filed an Amended Complaint in Intervention, Cross -Claim
and Counter -Claim for Declaratory and other Relief on December 15, 2011. Having reviewed
the pleadings, exhibits presented at trial, heard testimony, reviewed applicable law, heard
arguments of counsel, and being otherwise duly advised the Court makes the following findings
and conclusions:
FINDINGS OF FACT
1. Pursuant to Palm Beach County's home rule charter, municipal ordinances
prevail over county ordinances when there is a conflict, except when both unincorporated county
residents and municipal residents vote in a referendum to amend the Charter to create a
Countywide program. Once a referendum is approved by the voters, the countywide program is
created and applies to Palm Beach County and the respective municipalities. The Board of
County Commissioners (the "BCC") then adopts an ordinance to implement the referendum.
2. In 2009, the State Attorney for Palm Beach County convened a Grand
Jury to investigate county governance and public corruption in the county. The Grand Jury
recommended that the BCC create an Office of Inspector General ("the OIG") with investigatory
powers to address the findings in the report.
3. Thereafter, the BCC adopted an ordinance establishing an OIG with
powers applicable only to county governmental operations.
4. The Grand Jury's Final Presentment in 2010 recommended that the initial
OIG ordinance be submitted as a charter amendment for adoption by the voters in each
municipality to have the ethics ordinance, including the OIG, extended countywide. The
November 2, 2010 referendum was approved by a majority of the voters in each municipality.
The referendum approved by the voters specifically included a provision that required each
municipality to contribute to funding for the OIG.
5. On May 17, 2011, the BCC adopted Ordinance No. 2011-009 which
implemented the OIG and included a funding mechanism that required the municipalities to pay
a portion of the OIG costs. The ordinance authorized quarterly billings to be submitted by the
Clerk and Comptroller to the municipalities.
6. The OIG is required to submit a budget request each year to the Palm
Beach County League of Cities, Inc. ("the League"). The OIG must then be available to discuss
the budget request with the members of the League. Thereafter, the BCC must meet with a
delegation of the League regarding the budget. However, the BCC has final approval of said
budget. The initial invoices to the Municipalities were forwarded on October 11, 2011,
7. On November 14, 2011, the municipalities filed the instant four count
complaint seeking a declaration in Count I that the charges and collection of said charges for the
OIG are barred by sovereign immunity; in County II that the charges for the OIG constitute an
unlawful tax; in Count III that the funding mechanism in the OIG ordinance requires citizens of
the municipalities to pay twice for one service; and in Count IV that the funding mechanism in
the ordinance conflicts with general law as it infringes on the budgeting power of the
municipalities.
8. On December 28, 2013, the County filed an Amended Answer and
Affirmative Defenses asserting that (1) the municipalities do not have sovereign immunity to
avoid the county ordinance; (2) to the extent sovereign immunity applies such sovereign
immunity was waived by the vote approving the ballot referendums; (3) the ordinance is not
inconsistent with general law as the fees are either regulating fees or user fees; (4) municipal
residents are not being taxed as the fees may be passed on; (5) the fees are not an illegal double
tax; (6) the ballot informed the voters that the OIG would be funded in part by each
municipality; and (7) speculative increases in fees was not ripe for review.
CONCLUSIONS OF LAW
The charges to the municipalities for support of the OIG are not barred by
the doctrine of Sovereign Immunitv.
I
9. In Count I of the Amended Complaint the municipalities contend that
sovereign immunity bars this suit by the County to collect the charges in the invoices. The
County disputes that contention and asserts that sovereign immunity either does not apply or
does not prevent the County's efforts to enforce the provisions in the referendum.
10. In fact, the County directs this Court to Article VI, Section 6.3 of the Palm
Beach County Charter which specifically provides: "Approved charter amendments that transfer
or limit a service, function, power or authority of a municipality shall be effective in a
municipality only if the amendment is also approved by a majority of voters in that municipality
voting in the referendum." (Ordinance No. 2009-17). The County asserts that the provision
before this Court was placed on the ballot and would have exempted any municipality from the
provisions of the Inspector General and Ethics Charter amendment if a majority of the voters in
the municipality had voted against it. Instead, an overwhelming majority of the voters approved
the establishment of the OIG and its funding obligation.
11. The doctrine of sovereign immunity provides that a sovereign cannot be
sued without its own permission. American Home Assurance Company. v. National Railroad
Passenger Corporation, 908 So.2d 459, 471 (Fla. 2005). Sovereign (or governmental) immunity
derives entirely from the constitutional doctrine of separation of powers. Kaisner v. Kolb. 543
So.2d 732, 737 (Fla. 1989). See also Article II, §3, Florida Constitution.
12. The Court could not find and the parties did not cite to any authority that
applies directly to the issue at hand, specifically the authority of a county to sue a municipality
for charges authorized by popular vote in a a validly held referendum pursuant to a county Home
Rule Charter Amendment. The municipalities rely on Article II, Section 3 of the Florida
Constitution, which provides: "[t]he powers of the state government shall be divided into
legislative, executive and judicial branches. No person belonging to one branch shall exercise
any powers appertaining to either of the branches unless expressly provided herein".
13. Pursuant to the Constitution and case law, the judicial branch must not
interfere with the discretionary functions of the legislative or executive branches of government
absent a violation of constitutional or statutory rights. Trianon Park Condominium Association
Inc. v. City of Hialeah, 468 So.2d 912,918 (Fla. 1985). The municipalities thus contend that they
cannot face liability or suit for making budgetary decisions or for deciding what programs to
fund because these types of decisions are inherently governmental, legislative or discretionary.
14. However, the municipalities over state the extent of their discretion with
respect to establishing a budget as it relates to this issue. By approving the charter amendment,
the voters in the respective municipalities approved the funding for the OIG. This eliminated
any discretion by the municipalities to avoid funding the program. Thus, the cases cited by the
municipalities merely support the conclusion that a citizen may not sue a municipality to quibble
with its budgetary decisions. See, Crowe v City of Jacksonville Beach, 167 So.2d 753, 755 (Fla.
I DCA 1964)(action to enjoin city from expending funds from sale of revenue bonds and
purchasing land and constructing public buildings; "[w]hile the issues raised by the complaint
may fort the basis for opposition to the council members' bid for re-election to office, they deal
with acts lying within the discretion of the council with which courts are reluctant to interfere".
15. Further, the municipalities rely on section 166.241, Florida Statutes, to
support their contention that they have exclusive discretion to make a budget. However, this
statute merely provides that each municipality must make a balanced budget each fiscal year.
§166.241, Florida Statutes (2011). This section does not vest the municipalities with unfettered
discretion with respect to appropriations: The Attorney General recognized this in an Opinion
concerning whether a city could amend its charter pursuant to a petition initiative to require voter
approval for any capital improvement project exceeding $500,000.00 without conflicting with
the city's constitutional home rule power. See Attorney General Opinion 2009-12. The
Attorney General concluded that, in the absence of a conflicting general law, a city could so
amend its charter. Additionally, Attorney General Opinion 90-38 concluded that a city's charter
could be amended to require referendum approval for the issuance of all municipal bonds.
However, in Attorney General Opinion 86-89, it was concluded that a municipality may not
amend its charter to provide that no ad valorem tax on real and personal property may be levied
without referendum approval. Such a charter amendment would have limited the authority of the
municipality's governing body to levy ad valorem taxes in direct contravention of section
195.207, Florida Statutes, prohibiting a municipal charter from limiting the governing body's
authority to levy ad valorem taxes.
16. Attorney General Opinion 2009-12 further concluded that the statutes
governing the adoption of a budget for a municipality are not as extensive as those provided in
Chapter 129, Florida Statutes. Section 166.241, Florida Statutes merely provides that the
governing body of each municipality shall adopt a budget each fiscal year. The opinion
acknowledged that there are no general prohibitions against a charter requiring citizens'
initiatives for municipal salaries. However, it was noted that the propriety of referendum
approval for capital projects may depend upon the particular project in question and the existence
of any general law providing for such projects.
17. Thus, each municipality's power to make a budget is not a purely
discretionary function as its discretion may be modified or restricted by the electorate through its
referendum powers. In this case, the approval by the voters of the referendum authorized the
governing bodies to establish a line item in the budget to contribute to funding of the OIG. This
eliminated any discretion that the municipalities may have had as to the funding.
18. "Judgmental or discretionary functions are immune from legal action,
whereas operational acts are not protected by sovereign immunity". Willingham v. City of
Orlando, 929 So.2d 43, 50 (Fla. 5 DCA 2006); see also City of Freeport v. Beach Community
Bank, 108 So. 3d 684, 687 (Fla. 1 DCA 2013) ("[W]here governmental actions are deemed
discretionary, as opposed to operational, the government has absolute immunity from suit").
When the Courts describe a "discretionary" function for which a municipality enjoys sovereign
immunity, they mean that the governmental act in question involved an exercise of executive or
legislative power such that, for the Court to intervene ..., it inappropriately would entangle itself
in fundamental questions of policy and planning". Kaiser, 543 So.2d at 737. An `operational"
function, meanwhile, "is one not necessary to or inherent in policy or planning that merely
reflects a secondary decision as to how those policies or plans will be implemented". Id. Thus,
"[s]overeign immunity prohibits the judiciary from second guess[ing] the political and police
4
power decisions of coordinate branches of government about a violation of constitutional or
statutory rights". City of Freeport, 108 So. 3d at 687 (quoting Trianon Park Condominium
Association, 468 So.2d at 918).
19. In this case, sovereign immunity would bar an action against the
municipalities by the county if the resultant litigation would require the Court to become
inappropriately entangled in the discretionary budgeting decisions of the municipalities. The
issue in this case does not involve a discretionary decision. This Court concludes that there is a
legal obligation pursuant to the implementing ordinance requiring the municipalities to pay the
charge. This suit does not require any judicial "second guessing" or weighing of policy matters.
The County's Charges to the Municipalities for the OIG Do Not
Unlawfully Interfere with the Municipalities' Home Rule Power to Decide Their Own
Budgets.
20. The Implementing Ordinance does not infringe upon the authority of the
municipalities to budget and appropriate funds. Although it requires the municipalities to
contribute to the funding of the OIG, it only references the budgeting process because
expenditures may only be made pursuant to a municipality's annual budget. The language in the
Implementing Ordinance acknowledges that each municipality will have to include in its budget
a line item for the OIG. It does (1) not require the municipalities to fund the program out of
their general fund, (2) not indicate how the municipalities should obtain the money for
contribution, or (3) indicate how the municipalities should budget to pay the fees. Hence, the
doctrine of sovereign immunity does not prevent the county from enforcing the Implementing
Ordinance.
The Municipalities Cannot Invoke the Doctrine of Sovereign Immunitv
Against Themselves.
21. The Municipalities assert that sovereign immunity bars collection of the
charges imposed by the Implementing Ordinance. They further assert that the County has no
authority to dictate what programs are funded by the municipalities. In this instance, the citizens
of the municipalities approved the extension of the OIG to their respective municipalities and the
requirement to contribute funding to support the OIG.
22. The Florida Constitution provides that all political power is inherent in the
people. Article I, Section 1, Florida Constitution. In Florida Land Company v. City of Winter
Springs, 427 So 2d 170, 172 (Fla. 1983), the Court held that "[tjhe concept of referendum is
thought by many to be a keystone of self government and its increasing use is indicative of a
desire on the part of the electorate to exercise greater control over the laws which directly affect
them". In this case, the people exercised their referendum power when a majority of the voters
from each municipality voted to extend the operations of the OIG to their respective municipality
and contribute funding thereto. The governing bodies now attempt to circumvent the actions of
their people by invoking the doctrine of sovereign immunity. This suit to enforce the charges is
based on the legal obligations approved by the citizens of the respective municipalities. Further,
the municipalities present no persuasive legal authority to support these assertions that sovereign
5
immunity invalidates the vote of approval by their respective citizens.
The Citizens of the Municipalities Entered into a Contract on Behalf of Their
Governing Bodies to Fund the OIG.
23. As noted above, each municipality must adopt a budget for each fiscal
year and the budget must regulate the expenditures of the municipality. §166.241, Florida
Statutes (2011). An officer of the municipality may not expend or contract for expenditures
except pursuant to the adopted budget. As also noted above, however, "[a]ll political power is
inherent in the people. The enunciation herein of certain rights shall not be construed to deny or
impair others retained by the people". Article 1, Section 1, Fla. Const.
24. The Fourth District Court of Appeal has thus held that the people could
repeal an ordinance by referendum that authorized the sale of an auditorium and property owned
by the municipality. Brooks v Watchtower Bible & Tract Society of Florida, Inc., 706 So. 2d
85, 90 (Fla. 4' DCA 1998). In Brooks, the city approved ordinances that authorized the sale of
the city auditorium and property surrounding the auditorium. After the ordinance took effect, the
mayor and city clerk signed the contract to sell the property. Some of the registered voters of the
city filed a petition to repeal the ordinance and the city notified the buyer that it could not
proceed with the contract until after the election on the petition was held. The buyer filed suit to
enjoin the city from holding an election to vote on the referendum. Id. The court held that the
people of the city have a right to a referendum and even though the city has the right to contract,
an ordinance repealing a contract by the city does not necessarily make the ordinance
unconstitutional.
25. Consequently, because the citizens of a municipality through a referendum
may repeal a contract, it follows that the citizens of a municipality may enter into a contract (or
force the city officials to do so) by exercising their referendum power. In this case, the majority
of voters from the thirty-eight municipalities who voted on the ordinance used their referendum
power and voted that the OIG should apply to their respective municipalities and that the
municipalities should contribute to the funding of the program. Therefore, the Municipalities
may not invoke sovereign immunity to avoid the obligation. See American Home Assurance
Company, 908 So. 2d at 476 (municipality may not use sovereign immunity to defeat its
obligations under a contract). The people are the municipalities and the officials who represent
the people may not undermine the electorate process because they disagree with the vote of the
people.
The Implementing Ordinance Does Not Impose an Unlawful Tax, a it is a
Valid User Fee or Regulatory Fee.
26. In Count II of their Amended Complaint, the Municipalities contend that
the Implementing Ordinance imposes an unlawful tax. "[A] tax is an enforced burden imposed
by sovereign right for the support of the government, the administration of law, and the exercise
of various functions the sovereign is called on to perform". State v. City of Port Orange, 650 So.
2d 1, 3 (Fla. 1994) citing City of Boca Raton v. State. 595 So. 2d 25 (Fla. 1992). "The power of
state and local governments to levy taxes is governed by the constitution". Collier County v.
R
State, 733 So. 2d 1012, 1014 (Fla. 1999). "No tax shall be levied except in pursuance of law.
No state ad valorem taxes shall be levied upon real estate or tangible personal property. All
other forms of taxation shall be preempted to the state except as provided by general law."
Article VII, §1(a), Florida Constitution. Moreover, local governments, including counties, are
authorized by law to levy ad valorem taxes, and may be authorized by general law to levy other
taxes, except ad valorem taxes on intangible personal property and taxes prohibited by the
Florida Constitution. /d, §9(a). Here, the charge for the OIG cannot be a lawful tax because it is
not an ad valorem tax and it is not authorized by general law.
27. While the charge cannot be imposed lawfully as a tax, the County does
possess the authority to impose user fees. See Collier County, 733 So. 2d at 1014. "User fees
are charges based upon the proprietary right of the governing body permitting the use of the
instrumentality involved". Port Orange, 650 So. 2d at 3. In Port Orange, the Florida Supreme
Court offered the following three -prong test to determine whether a particular charge is a user
fee or a tax:
Such fees share common traits that distinguish them from taxes: [1] they are
charged in exchange for a particular governmental service [2] which benefits the
party paying the fee in a manner not shared by other members of society, and [3]
they are paid by choice, in that the party paying the fee has the option of not
utilizing the governmental service and thereby avoiding the charge.
id. (citations omitted). The Municipalities contend that the charge for the OIG Program fails the
second and third prongs of this test.
28. The Municipalities assert that the charge for the OIG does not benefit the
individual Municipalities in a manner not shared by other members of society. Their argument
ignores the obvious benefits that the Inspector General uniquely provides to municipal
governments. The Inspector General is performing a service in the form of investigations, audits
and reviews of municipalities' governments, and such services are only available in
municipalities that approved the referendum. The fee is also proportionate to the amount of
services the municipalities may receive from the OIG. The ordinance states "the funding base is
a minimum level of funding, determined as a percentage of contract activity of the governmental
entities subject to the authority of the inspector general". (emphasis added,). Thus, the
contribution of each municipality is determined by the contract activity of each municipality that
comes within the jurisdiction of the OIG. Although the County conceded at trial that at any
given time one municipality may receive more attention than another municipality depending on
situations, the contribution is still proportionate to the contracts subject to the OIG and the
services and benefits to municipalities will inevitably balance out over the years. This argument
is without merit.
29. The Municipalities' primary contention with respect to the user fee issue is
that the charge for the OIG is mandatory and thus not paid by choice. Notably, "[o]f the three
prongs set forth in City of Port Orange, this prong is considered the least significant". City of
Miami v. Haiglev, 143 So. 3d 1025, 1031 (Fla. 3d 2014) (citing I4Commerce Center, Phase 1I.
Unit I v. Orange County, 46 So. 3d 134, 136 (Fla. 5`h DCA 2010) (noting that of the three
7
requisite traits for a valid user fee set forth in City of Port Orange, the "most significant of these
traits" are the first two).
30. The Municipalities further assert that a party must be able to "opt out" for
a fee to be paid by choice. But Port Orange, provides that the party must only have the option of
not utilizing the governmental service and thereby avoiding the charge. Port Orange, 650 2d at
3. The Municipalities had that option in the November 2, 2010 referendum vote. At that time,
the Municipalities had the opportunity to opt -out, but the referendum was passed by a significant
number of the voters. Furthermore, just as the voters opted into the service through referendum,
the voters can opt out of the service by referendum. See §§ 5.1 and 6.3, Palm Beach County
Charter, Hence, the court concludes that the charge for the OIG the Implementing Ordinance is a
valid user fee and not an unlawful tax.
31. The County's position is that the charge for the OIG is a valid regulatory
fee and case law supports that position. A municipality may levy reasonable business,
professional, and occupational regulatory fees, commensurate with the cost of the regulatory
activity, including consumer protection, on such classes of businesses, professions, and
occupations, the regulation of which has not been preempted by the state or a county pursuant to
a county charter". § 166.221, Florida Statutes (2011); see also Palm Beach County v. Bellsouth
Telecommunications, Inc., 819 So. 2d 876, 878 (Fla. 4" DCA 2002) ("[O]ur supreme court has
consistently found the term `municipality' to include `charter county' unless the statute under
review draws a clear distinction between the two or expresses an intent to exclude charter
counties from its purview". A regulatory fee may be charged pursuant to the states police
powers, however, such fee may not be used for the purpose of raising revenue. Broward County
v. Janis Development Corporation, 311 So. 2d 371, 375 (Fla. 4"' DCA 1975). Regulatory fees
are solely to offset the expenses of regulation.
32. In this instance, Palm Beach County is a charter county and thus, has all
the powers of self-government granted by the constitution and state of Florida. In the event of
conflicts with municipal laws, the county's laws prevail in matters related to ethics with regard to
the OIG where the majority of voters in such municipality approved the OIG referendum. On
November 2, 2010, the majority of voters in all thirty-eight municipalities voted through
referendum to approve OIG and make the Municipalities subject to the jurisdiction of the OIG
and contribute funding. Therefore, because charter counties have the power of self-government
and the Municipalities' voters, by majority vote, approved the referendum, Palm Beach County
was given the power to regulate and enforce ethics through the OIG.
33. The Municipalities contend that a regulatory fee must be imposed pursuant
to a regulatory scheme with detailed standards, rules, guidelines, and requirements relating to the
conduct to be regulated. See, e.g. City of North Miami v. Williams, 555 So. 2d 399 (Fla. 3d
DCA 1990). The Office of Inspector General was created to detect, deter, prevent, and eradicate
fraud, waste, mismanagement, misconduct, and other abuses in county and municipal
government. The Inspector General has the authority to investigate county and municipal
matters, publish the results of such investigations, review and audit past and present programs,
accounts, records, contracts, change orders, and transactions, and prepare reports and
recommendations to present to the county and municipalities. It also requires county
9
administrators, municipal managers, municipal administrators, or mayors where the mayor is the
chiefs executive officer to notify the inspector general of suspected mismanagement of a
contract or loss exceeding $5,000.00, and to be notified of meetings duly noticed to the public
that involve the procurement selection committee concerning the procurement of goods or
services by the county or any municipality. Thus, although the OIG ordinance does not include
explicit regulations directing the management of the Municipalities' departments, upon an
investigation, audit, or review the OIG provides recommendations of how such departments may
be operated in a more efficient manner. The also ordinance includes regulations that require the
county and municipalities to take actions in specific situations. The lack of explicit standards
with which the county and municipalities must comply is not fatal to the ordinance, as there is
not a specific formula as to how to ethically operate governments and governmental departments.
34. Finally, the charges defray the cost of the investigations, audits, and
reviews the Inspector General provides to the county and municipalities and enforcement of the
notification requirements. See Flores v. City of Miami, 681 So. 2d 803, 808 (Fla. 3d DCA 1996)
(holding that the fee was a regulatory fee and not a tax because the fee was designated to defray
the cost of enforcing an ordinance that placed limitations on vendors). Therefore, because the
county has the power to regulate, the OIG regulates the county and municipalities, and the fee is
charged to offset the cost of regulation, the fee is a valid regulatory fee.
The Implementing Ordinance is not Invalid for Requiring Payment for the
Same Services Twice.
35. In Count III of their Amended Complaint, the Municipalities allege that
the funding mechanism is unlawful (and inequitable) because it requires the residents of
municipalities to pay for the services of the Inspector General twice: once by paying ad valorem
taxes to the County, and again through the funding mechanism. In contrast they assert that
residents of the unincorporated areas of the County only pay for it once through ad valorem
taxes. The Municipalities appear to have abandoned this claim, as they did not brief it in their
Trial Memorandum or argue it at trial. This assertion is without merit.
36. Article VIII, Section I(h) of the Florida Constitution provides: "Taxes;
limitation. Property situate within municipalities shall not be subject to taxation for services
rendered by the County exclusively for the benefit of the property or residents in unincorporated
areas". "The somewhat unique concept embodied in this constitutional provision which
prohibits taxation without corresponding (but not necessarily commensurate) benefit does not
prohibit `dual taxation' or `double taxation' as those terms are ordinarily understood". Palm
Beach County v. Town of Palm Beach, 426 So. 2d 1063, 1066 (Fla. 4" DCA 1983). "What is
prohibited is `taxation without benefit[.]"' Id. "A petitioner bears the burden of proving the
`negative -that a service provided by the county and funded by county —wide revenues does not
provide a real and substantial benefit to the particular municipality"'. Palm Beach County V.
City of Boca Raton, 995 So. 2d 1017, 1019 (Fla. 4`h DCA 2008).
37. Here, the Municipalities erroneously contend that "[a] taxpayer receives
the same services from the OIG, whether he or she is within an incorporated municipality or the
unincorporated areas of the County". (Amended Complaint ¶ 97.) This is simply incorrect
E
based on the unique benefit the OIG offers the citizens of the Municipalities. In addition to the
oversight of the County government that the OIG offers, the Municipalities and their citizens
have the opportunity to file complaints and receive investigations, audits and reviews of their
own governing bodies. This is clearly a real and substantial benefit uniquely provided to the
Municipalities.
The Implementing Ordinance is Not Inconsistent with General Law.
38. Finally, in Count IV of their Amended Complaint, the Municipalities
contend that the Implementing Ordinance is inconsistent with general law. Under section 1(g) of
Article VIII of the Florida Constitution, a county may not enact an ordinance which is
inconsistent with general law. See, e.g., Hillsborough County v. Florida Restaurant Association,
Inc., 603 So. 2d 587 (Fla. 2d DCA 1992).
39. The only general law that the Municipalities suggest the Implementing
Ordinance is inconsistent with is section 166.241, Florida Statutes. That statute provides that
"[t]he governing body of each municipality shall adopt a budget each fiscal year. The budge
must be adopted by ordinance or resolution unless otherwise specified in the respective
municipality's charter. The amount available from taxation and other sources, including
amounts carried over from prior fiscal years, must equal the total appropriations for expenditures
and reserves. The budget must regulate expenditures of the municipality, and it is unlawful for
any officer of a municipal government to expend or contract for expenditures in any fiscal year
except in pursuance of budgeted appropriations." §166.241, Florida Statutes (2011).
40. Based on section 166.241, Florida Statutes, the municipalities that they
have the exclusive authority to decide when to spend municipal monies, what programs to spend
monies on, how much to spend, and how to allocate money in periods of limited resources.
However, the statute does not actually clearly vest them with those powers and does not make
such powers exclusive. Instead, it merely requires the municipalities to make a balanced budget
each year. See State ex rel. Cole v. Keller, 129 Fla. 276, 176 So. 176 (1937) (annual budget "is
nothing more than an invoice of the city's activities during the ensuing year and an estimate of
their cost."); Town of North Miami v. Travis Company, 118 Fla. 879, 884, 160 So. 360, 362
(1935) ("The purpose of adopting a budget is to determine what amount of money is necessary to
be raised by taxation.").
41. Thus, "[t]here is conflict between a local ordinance and a state statute
when the local ordinance cannot coexist with the state statute". Phantom of Brevard. Inc.
vs. Brevard County, 3 So. 3d 309, 314 (Fla. 2008). "Stated otherwise, `[t]he test for
conflict is whether `in order to comply with one provision, a violation of the other is
required"'. Id. (quoting Browning v Sarasota Alliance for Fair Elections, Inc., 968 So.
2d 637, 649 (Fla. 2d DCA 2007). The Implementing Ordinance requires the
Municipalities to make a particular appropriation. Section 166.241, Florida Statutes,
meanwhile, requires the Municipalities to ensure that they account for that appropriation
with revenue. The Municipalities are fully capable of complying with both the
Implementing Ordinance and section 166.241. There is thus no conflict between the two,
and no violation of Article VIII, section I(g), Florida Statutes.
10
Accordingly, it is
ORDERED AND ADJUDGED that Plaintiffs' request for declaratory relief is
GRANTED as follows:
A. The Municipalities do not enjoy sovereign immunity from suit to collect
the charges in the invoices pursuant to the Implementing Ordinance;
B. The Implementing Ordinance does not impose an unlawful tax, as it
constitutes both a valid user fee and a valid regulatory fee which the County may impose upon
the Municipalities;
C. The Implementing Ordinance is not invalid for requiring payment for the
same services twice; and
D. The Implementing Ordinance is not inconsistent with general law,
specifically section 166.241, Florida Statutes.
DONE AND ORDERED in Chambers at West Palm Beach"P' /@ggch County,
Florida, this Jday of March, 2015. ��[J D
MAR 4P D
CA?yfR/ 112015
Q Nf M.
CATHERINE M. BRUNSON, Circuit o r'U /y
Copies fumished to:
DOUGLAS N. YEARGIN, ESQ.
P.O. Box 3366
West Palm Beach, FL 33402
PHILIP MUGAVERO, ESQ.
300 North Dixie Highway, Suite 359
West Palm Beach, FL 33401
HELENE C. HVIZD, ESQ.
300 North Dixie Highway, Suite 359
West Palm Beach, FL 33401
HAMPTON C. PETERSON, ESQ.
301 North Olive Ave., 9'h Floor
West Palm Beach, FL 33401
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1
TOWN OF GULF STREAM, VILLAGE OF
TEQUESTA, CITY OF RIVIERA BEACH, TOWN
OF JUPITER, CITY OF DELRAY BEACH,
TOWN OF PALM BEACH SHORES, TOWN OF
MANALAPAN, VILLAGE OF WELLINGTON,
TOWN OF MANGONIA PARK, CITY OF PALM
BEACH GARDENS, TOWN OF HIGHLAND
BEACH, TOWN OF LAKE PARK, CITY OF
WEST PALM BEACH, TOWN OF OCEAN
RIDGE, CITY OF BOCA RATON, municipal
corporations of the State of Florida,
Plaintiffs,
VS.
PALM BEACH COUNTY, a political subdivision,
Defendant.
IN THE. CIRCUIT COURT FOR THE
FIFTEENTH JUDICIAL CIRCUIT IN
AND FOR PALM BEACH COUNTY,
FLORIDA
CASE NO:
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COMPLAINT FOR DECLARATORY RELIEF
Plaintiffs, TOWN OF GULF STREAM, VILLAGE OF TEQUESTA, CITY OF
RIVIERA BEACH, TOWN OF JUPITER, CITY OF DELRAY BEACH, TOWN OF PALM
BEACH SHORES, TOWN OF MANALAPAN, VILLAGE OF WELLINGTON, TOWN OF
MANGONIA PARK, CITY OF PALM BEACH GARDENS, TOWN OF HIGHLAND BEACH,
TOWN OF LAKE PARK, CITY OF WEST PALM BEACH, TOWN OF OCEAN RIDGE,
CITY OF BOCA RATON, municipal corporations of the State of Florida, ("Municipalities"),
sue Defendant, PALM BEACH COUNTY (the "County"), for declaratory relief as follows
GENERAL ALLEGATIONS
1. This is an action for declaratory relief pursuant to Chapter 86, Florida Statutes.
2. This action arises from the County's demand that the Municipalities pay a portion
of the costs associated with the countywide Office of Inspector General Program. The
Municipalitieg do not bring this action to overturn the Inspector General Program. Instead, the
Municipalities bring this action solely to contest the funding mechanism for the Program. The
funding mechanism is unlawful and unenforceable against the Municipalities given that it is
contrary to law. For the funding of the Inspector General Program to be lawful, the County must
fund it in its entirety.
3. The County is a political subdivision of the State of Florida.
4. The Municipalities are municipal corporations of the State of Florida.
5. This court has jurisdiction over the parties and the subject matter as all parties are
located in Palm Beach County, the ordinances at issue were adopted in Palm Beach County and
this lawsuit seeks declaratory relief.
6. Venue is proper in Palm Beach County.
7. Pursuant to Ch. 164, Fla. Stat., the Municipalities will file a motion to abate this
proceeding until the parties can participate in the statutory conflict resolution procedure.
FACTS COMMON TO ALL COUNTS
History of Countywide Proerams in Palm Beach Countv
8. Palm Beach County adopted a "home rule" Charter in 1985 ("the Charter"). Article
I, Section 1.3 of the Charter sets forth the relationship between County ordinances or regulations
and Municipal ordinances or regulations which conflict with one another. In accordance with this
Charter section, Municipal ordinances prevail over County ordinances to the extent of any conflict,
except in instances where the voters of both the County and the Municipalities have voted in a
referendum to amend the County Charter to create a "countywide" regulation on a particular
subject matter.
2
9. The approval of a "countywide" regulation by referendum vote makes that
regulation applicable in both the County and the Municipalities within the County. The
referendum process is initiated by a "Charter Ordinance," which has been adopted by the Board of
County Commissioners ("BCC") and which describes the proposed "countywide" regulation to be
voted on.
10. Prior to 2010, five amendments to the Charter occurred. All of these amendments
were initiated by the BCC, and were the subject of a Charter Ordinance.
11. Each of these amendments proposed countywide regulation on a particular subject
matter over which the County wanted to achieve uniform regulation within the municipalities as
well as the unincorporated portions of the County. Each of these amendments was approved by
the voters in both the Municipalities and the unincorporated portions of the County after a
referendum vote. These amendments included:
A. The Protection of Wells and Wellfields;
B. Countywide Impact Fees;
C. The creation of a Countywide Planning Council and Land
Use Element (repealed);
D. The establishment of a countywide level of service for
certain roads; and
E. Voluntary Annexation.
12. Each countywide program enumerated above has been and continues to be
entirely funded by appropriations from the BCC. All were administered and staffed by the
County Administrator through the appropriate County Department, with the exception of the
Countywide Planning Council, which had its own staff.
13. The Municipalities are not required to share in the costs of any of these
countywide. programs.
14. The Countywide Planning Council was an independent agency with an Executive
Director, planners, administrative personnel, and a General Counsel. Article VII, Section 7.15 of
3
the County's Charter provided: "The planning council shall annually adopt a budget and submit
it to the board of county commissioners... The county shall fund the planning council each year
in an amount reasonably sufficient to permit the planning council to accomplish its
responsibilities. " Accordingly, although the Countywide Planning Council was an independent
agency, it was at all times entirely funded by an annual appropriation by the BCC until the
program was repealed.
New Ethics Regulations in Palm Beach County and the Creation
of the Office of Inspector General
15. Following the conviction of three County Commissioners for crimes they
committed while in office and related to their official duties, the BCC initiated and adopted
ordinances intended to more strictly regulate themselves and County employees (collectively
referred to as the "Ethics Regulations").
16. The Ethics Regulations included Ordinances establishing a new Code of Ethics, a
Commission on Ethics to enforce the Code of Ethics, and an Office of Inspector General (the
"Inspector General"), which was designed to detect misconduct involving abuse, corruption,
fraud, waste, inefficiencies and mismanagement in County government.
Implementation of the Ethics Regulations Via Four (4) Inconsistent Ordinances
A. Original Ordinance
17. The Inspector General's Original implementing Ordinance (Ordinance No. 2009-
049), which was applicable only in the unincorporated portions of Palm Beach County, was
adopted by the BCC on December 15, 2009 (the "Original Ordinance"). A copy of the Original
Ordinance is attached hereto as Exhibit 1 and incorporated herein by reference.
18. Section 2(B)(4) of the Original Ordinance described the County's funding
mechanism for the Inspector General as follows:
4
The costs of reviews, audits, inspections and investigations by the
Inspector General shall be defrayed in part by imposition of a fee
which shall be equal to one quarter of one percent (0.25%) of the
contract price (hereinafter "IG contract fee). [emphasis added.]
19. The County imposed the IG contract fee on vendors and contractors that had
contracts with the County unless an exception applied.
20. Section 2(B)(4) of the Original Ordinance provided that the IG contract fee did
not apply to the following contracts:
a. Contracts for legal services;
b. Auditing contracts;
C. Contracts under one thousand dollars ($1,000), except for
decentralized purchase orders as set forth in the Palm
Beach County Purchasing Ordinance, section 2-51(f)(1)(1);
d. Federal, state and local government -funded grants;
e. Interlocal agreements;
f. Revenue -generating contracts; and
g. Purchases made pursuant to the State of Florida
Department of Revenue approved Sales Tax Recovery
Program.
21. Section 2(H) of the Original Ordinance, entitled "Financial Support and
Budgeting" established the County's sole responsibility to appropriate for and fund the Inspector
General during fiscal year 2009-2010 as follows:
In order to ensure adequate funding for the prompt establishment
of the Inspector General pending implementation, the Board of
County Commissioners hereby approves an amount equal to three
hundred twenty thousand dollars ($320,000) to fund all Inspector
General operations for the remainder of the 2009-2010 fiscal year.
B. Amended Ordinance
22. On September 28, 2010, the BCC adopted Ordinance No. 2010-041 to, among
other things, amend the funding mechanism that was contained in the Original Ordinance (the
"Amended Ordinance"). A copy of the Amended Ordinance is attached hereto as Exhibit 2 and
incorporated by reference.
R
23. Section 2-423(4) of the Amended Ordinance provided that the funding
mechanism for the Inspector General would now be as follows:
The costs of reviews, audits, inspections and investigations by the
inspector general shall be funded at minimum in an amount equal
to one quarter of one (0.25) percent of contracts entered into by the
county, as may be adjusted as necessary (hereinafter "minimum
funding percentage"). [emphasis added.]
24. This new funding mechanism eliminated the IG contract fee imposed on vendors
and contractors to fund the Inspector General Program and instead stated that the County itself
would fund the Program in an amount equal to one quarter of one percent (0.25%) of County
contracts.
25. The same contracts mentioned in paragraph 20 above were exempt from the new
minimum funding percentage.
26. Section 2-429 of the Amended Ordinance again confirmed that the County was
solely responsible to fund the Inspector General for the remainder of the 2009-2010 fiscal year in
an amount equal to $320,000.00.
C. Ballot Ouestion Ordinance
27. Prior to and after its adoption of the Ethics Regulations, the BCC unilaterally
determined that it was necessary to extend the Ethics Regulations to the Municipalities. To do so,
the BCC adopted Ordinance No. 2010-019 on July 20, 2010 (the `Ballot Ordinance"). A copy of
the Ballot Ordinance is attached hereto as Exhibit 3 and incorporated herein by reference.
28. The Ballot Ordinance called for a referendum to be held at the next election to ask
the voters of Palm Beach County whether to amend the County Charter and create a countywide
Code of Ethics, a countywide Commission on Ethics and a countywide Office of Inspector
General. Once approved, these countywide programs would be applicable in all municipalities
in addition to the unincorporated areas of the County where they were already in effect.
3
29. With respect to the proposed countywide Commission on Ethics and its funding,
Section 8.2 of the Ballot Ordinance provided: "The Commission on Ethics shall be adequately
funded by the County Commission and all other governmental entities that elect to be subject
to the authority of the Commission on Ethics pursuant to interlocal agreement." [emphasis
added.]
30. The Ballot Ordinance did not require the Municipalities to pay a proportionate
share of the funding for the operation of the Commission on Ethics if the referendum were passed.
31. Rather, the Ballot Ordinance only contemplated that the County and any
governmental entities who elected to enter into interlocal agreements with the County to
voluntarily come under the jurisdiction of the Commission on Ethics would share in the funding
of this Office.
32. The use of the language "that elect to" was intended to apply to the Constitutional
Offices, the School District of Palm Beach County, the Health Care District or other
governmental entities should those entities elect to enter into interlocal agreements with the
County to share in the funding of the Commission on Ethics.
33. The Ballot Ordinance's funding mechanism for the Commission on Ethics, to the
extent it did not require the Municipalities to share in the cost of the program, was consistent
with the previously adopted countywide programs mentioned in paragraph 11 above.
34. With respect to the funding for the countywide Inspector General Program, the
Ballot Ordinance proposed a funding mechanism that was materially different than the one used
for the Commission on Ethics. The Ballot Ordinance proposed Section 8.3 of the Ballot
Ordinance, entitled "Inspector General," contains the following statement at line 10:
The Office of Inspector General shall be funded at minimum in an
amount equal to one quarter of one percent of contracts of the
County and all other governmental entities subject to the authority
7
of the Inspector General (the "Funding Base") as determined by
the Implementing Ordinance.
35. According to Section 8.3 of the Ballot Ordinance, Municipalities, for the first time
since the County became a Charter County, would be required to share in the cost of a
countywide program.
36. Sections 8.3 and 8.4(a) of the Ballot Ordinance also contained provisions
demonstrating that the County retained the exclusive authority to fund the Office of the Inspector
General and that the Municipalities were powerless to determine the funding that was to be
expended for this Office. Section 8.3 provides:
The Board of County Commissioners may increase or decrease the
Funding Base upon a showing of need for such adjustment based
upon criteria contained in the Implementing Ordinance but in no
event shall the Funding Base be reduced below one quarter of one
percent unless the request for such reduction is made by the
Inspector General.
Section 8.4 further provides:
The Board of County Commissioners has adopted ordinances
establishing and providing for the funding, authority and powers of
the Palm Beach County Commission on Ethics and the Office of
Inspector General (the "Existing Ordinances").
37. With respect to the actual ballot language to be presented to the voters, Part 2 of
the Ballot Ordinance, entitled "Referendum and Ballot Language," stated:
On November 2, 2010, a general election is to be held, and in
accordance with the requirements of the Constitution and Laws of
Florida, the following question shall be placed on the ballot by the
Supervisor of Elections:
REQUIRING COUNTY CODE OF ETHICS, INDEPENDENT
ETHICS COMMISSION AND INDEPENDENT INSPECTOR
GENERAL
Shall the Palm Beach County Charter be amended to require the
Board of County Commissioners to establish by ordinances
applicable to Palm Beach County and all municipalities approving
8
this amendment: a Code of Ethics, an independent Commission on
Ethics funded by the County Commission, and an independent
Inspector General funded by the County Commission and all other
governmental entities subject to the authority of the Inspector
General?
YES
NO
38. The actual ballot language was silent as to the specific method to be used in
funding the Inspector General Program.
39. Both the Ballot Ordinance and actual ballot language were silent as to the
anticipated budget for, or the estimated annual costs to be paid by the County and the
Municipalities to fund the Inspector General program.
40. Both the Ballot Ordinance and actual ballot language were silent as to what
contracts would be included in calculating the amount equal to 0.25% of contracts to fund the
Inspector General program.
41. Since the Ballot Ordinance and ballot language were silent on the issue of
estimated costs and what contracts would be included in the 0.25% of contracts calculation, the
only ordinances available for review by the voters prior to the referendum that discussed these
issues were the Original Ordinance and the Amended Ordinance. The current cost of the e
Inspector General Program is more than 8 times higher than what was shown in these
Ordinances.
42. On November 2, 2010, the referendum vote on the Ethics Regulations was held.
A majority of the voters of each of the 38 Municipalities and of Palm Beach County as a whole
approved the Ballot as presented in the preceding paragraph 37.
0
D. Implementine Ordinance
43. On May 17, 2011, the County Commission adopted the ordinance implementing
the newly approved countywide Inspector General Program and providing for the funding for
said Program (the "Implementing Ordinance"). The Implementing Ordinance repealed the
Original Ordinance (Ordinance No. 2009-049). A copy of the Implementing Ordinance is
attached hereto as Exhibit 4 and incorporated herein by reference.
44. The Implementing Ordinance proposed an entirely different method to fund the
Inspector General's Office than what had been utilized in the Original Ordinance (Ordinance No.
2009-049), the Amended Ordinance (Ordinance No. 2010-041), and the Ballot Ordinance
(Ordinance No. 2010-019).
45. The Implementing Ordinance provides that the County and Municipalities'
proportionate share for the costs of the Inspector General Office are to be based on the actual
expenses of the County and each Municipality as reported to the Florida Department of Financial
Services Local Government Electronic Reporting System ("LOGER"). In this regard, Section 2-
429(1) and (2) of the Implementing Ordinance, entitled "Financial support and budgeting,"
provides as follows:
(1) The county and municipalities shall fund the inspector
general's office proportionately, based on the actual expenses of
each governmental entity as recorded in the most recent audited
year and reported in the Florida Department of Financial Services
Local Government Electronic Reporting system (LOGER),
pursuant to section 218.32, Florida Statutes, as may be amended.
(2) The County and each municipality's proportionate share
shall be based on each entity's actual expenses as defined in the
then current Uniform Accounting System Manual, published by
the State of Florida, Department of Financial Services, Bureau of
Local Government, and shall include the following Object
Categories: 30 — Operating Expenditures/Expenses; 60 — Capital
Outlay; and 80 — Grants and Aids. Notwithstanding the above,
however, law enforcement, pension funds, electric utility services,
10
fire control and intergovernmental transfer costs shall not be
included in the proportionate share calculation.
(emphasis added).
46. The Implementing Ordinance contains a contradictory statement that the funding
base for the Inspector General's Office is not based on "actual expenses," but is based on an
amount equal to one quarter of one percent (0.25%) of contracts as was provided for in the Ballot
Ordinance. Section 2-429.1(1) and (2) of the Implementing Ordinance, entitled "Funding Base,"
provides in relevant part:
(1) The funding base is a minimum level of funding,
determined as a percentage of contract activity of the governmental
entities subject to the authority of the inspector general ... The
funding base is currently set at an amount equal to one quarter of
one percent (0.25%) of the contracts as described in section 2-
429(2) ....
(2) ... In no event shall the funding base be reduced below one
quarter of one percent unless such reduction is made by the
inspector general.
47. The Implementing Ordinance does not describe how the funding base, which is
based on contract amounts, relates to the County and Municipality's proportionate share
calculation, which is based on actual expenses.
48. Section 2-429(8) of the Implementing Ordinance further provides that:
The county and each municipality's proportionate share for the
period of June 1, 2011 through September 30, 2011 shall be as set
forth in Exhibit A which is attached hereto and incorporated herein
by reference. The Office of the Clerk and Comptroller shall
invoice the County, upon adoption of this ordinance, $946,764.
This amount is based on the estimated expenses through June 1,
2011 of $483,333, plus the County's proportionate share as
reflected on Exhibit A. The Office of the Clerk and Comptroller
shall invoice each municipality for their proportionate share as set
forth in subsection (7) beginning with the first invoice on October
10, 2011.
11
49. Exhibit A referred to in Sec. 2-429(8) provides that the Municipalities'
proportionate share of funding for the Inspector General for the period June 1, 2011 through
September 30, 2011 is $327,898.
50. There is no provision in the Implementing Ordinance which gives the
Municipalities the right to control their proportionate share of the funding for the Inspector
General's Office.
51. The County issued its first invoice to the Municipalities for the Inspector General
funding on October 10, 2011.
COUNT I — DECLARATORY RELIEF
(UNLAWFUL TAX AS TO MUNICIPALITIES)
52. The Municipalities reallege and incorporate by reference paragraphs 1 through 51
as if fully stated in this count.
53. The County is currently requiring the Municipalities to pay their proportionate
share for the Countywide Inspector General Program.
54. The County's imposition of cost sharing on the Municipalities is not lawful.
55. The required municipal shares do not constitute a user fee.
56. There is no rational nexus between the service being performed by the Inspector
General and the share charged. In fact, the Inspector General may never review, audit or
investigate a contract that is the subject of the funding base or that constitutes an actual expense
of the Municipality even though the County contends the proportionate share is based on these
items. Additionally, the proportionate share is not voluntary under the Countywide Program; the
Municipalities are required to pay their proportionate share.
12
57. The required municipal shares do not constitute a special assessment. Special
assessments are tied to special benefits for real property. The shares are not related to any
benefit to real property.
58. Given that the Municipalities' required shares do not constitute a user fee or a
special assessment, they can only be a tax.
59. There has been no provision by general law or the State Constitution authorizing
the County to levy this tax. Therefore, this tax is unlawful and unenforceable.
60. The voters approved the ballot question making the Municipalities subject to the
Inspector General Program. The fact that the voters approved the ballot question, however, does
not make it legal. See Gaines v. City of Orlando, 450 So.2d 1174 (Fla. 5th DCA 1984) (a charter
provision that conflicts with the state constitution or state law is not any more lawful simply
because the charter provision was adopted by the electorate).
61. As an alternative to the current funding method for the Inspector General
Program, the County has previously stated that it can require County and municipal vendors to
pay a 0.25% contract fee on every contract they enter into with the County or Municipalities (the
"IG Contract Fee").
62. Under this alternative funding method, the County has stated that the
Municipalities would be responsible for imposing the IG Contract Fee on their respective
vendors and collecting said Fee.
63. This IG Contract Fee is the same one that the County previously followed
pursuant to the Original Ordinance (Ordinance No. 2009-049), but repealed pursuant to the
Amended Ordinance (Ordinance No. 2010-041).
13
64. The Implementing Ordinance (Ordinance No. 2011-009), which contains the
current funding mechanism, does not mention that the Inspector General Program will be funded
Pursuant to the IG Contract Fee.
65. The County cannot unilaterally change the current funding mechanism to
something different than that which was set forth in the Ballot Ordinance.
66. Further, the County's imposition of the IG Contract Fee on vendors to fund the
Inspector General Program constitutes an unlawful tax and is unenforceable for the same reasons
as set forth in paragraphs 55-59 above.
67. There are no legal means by which the Municipalities can pass this cost on to
vendors or collect this unlawful Fee from vendors.
68. The Municipalities cannot be compelled to implement a program to collect an
unlawful tax.
69. The Municipalities are in doubt as to their rights and the effect of the County's
actions as described above.
70. There is a real and present controversy concerning the legality of the County's
actions regarding the funding for the Inspector General Program.
71. There exists a bona fide actual present and practical need for a declaration
regarding these issues since the County sent invoices to the Municipalities on October 10, 2011,
demanding payment from each Municipality.
WHEREFORE, the Municipalities respectfully request that this Court enter a judgment
declaring that:
a. The Municipalities shall not be required to share in the expenses of the Inspector
General Program;
b. The Municipalities shall not be required to implement a program to collect the IG
Contract Fee from its vendors to fund the Inspector General Program;
14
C. Any and all expenses relating to the Inspector General Program shall be paid for
solely by the County;
d. Any efforts by the County to charge the Municipalities for the expenses of the
Inspector General Program are unlawful and unenforceable; and
e. The Municipalities are awarded their costs incurred in the prosecution of this
action and are granted such other and further relief as deemed just and proper
under the circumstances.
COUNT II — DECLARATORY RELIEF
(UNLAWFUL FUNDING MECHANISM DUE TO PAYMENT
FOR THE SAME SERVICES TWICE)
72. The Municipalities reallege and incorporate by reference paragraphs I through 51
as if fully stated in this count.
73. The Ballot Ordinance and Implementing Ordinance both require that
Municipalities pay a proportionate share for the Countywide Inspector General Program.
74. The required proportionate cost sharing is unlawful and unenforceable.
75. Municipal residents, whether individuals or businesses, pay the same ad valorem
county taxes as those residents living in unincorporated areas.
76. A portion of these ad valorem county taxes paid by municipal residents go toward
paying for the County's share of the Inspector General Program.
77. Municipal residents, therefore, already pay for the Inspector General Program
through their payment of ad valorem county taxes.
78. Under the current funding mechanism, these same municipal residents also are
required to pay ad valorem municipal taxes, a portion of which goes toward the Municipalities'
share of the Inspector General Program.
F
79. Under the current funding mechanism, municipal residents are required to pay for
the services of the Inspector General twice while the residents of the unincorporated areas of the
County are only required to pay for the services of the Inspector General once.
80. A taxpayer receives the same services from the IG, whether he or she is within an
incorporated municipality or the unincorporated areas of the County. A municipal taxpayer
receives no additional services in exchange for paying more.
81. The funding for the Inspector General Program is inequitable to municipal
residents. The Municipalities are being forced to take taxpayer monies away from municipal
programs to fund the Inspector General Program when municipal residents have already paid
their share of ad valorem county taxes.
82. The County should be required to pay for the entire countywide Inspector General
Program as it has done for all other countywide programs approved by referendum.
83. The Municipalities are in doubt as to their rights regarding the payment of the
amounts demanded by the County to fund the countywide Inspector General Program.
84. There is a real and present controversy concerning the lawfulness of the County's
actions regarding the funding for the Inspector General Program.
85. There exists a bona fide actual present and practical need for a declaration
regarding these issues since the County sent invoices to the Municipalities on October 10, 2011,
demanding payment from each Municipality.
WHEREFORE, the Municipalities respectfully request that this Court enter a judgment
declaring that:
a. Municipal residents are entitled to pay a single fee for the Inspector. General's
services, rather than a county fee and a municipal fee for these services;
16
79. Under the current funding mechanism, municipal residents are required to pay for
the services of the Inspector General twice while the residents of the unincorporated areas of the
County are only required to pay for the services of the Inspector General once.
80. A taxpayer receives the same services from the IG, whether he or she is within an
incorporated municipality or the unincorporated areas of the County. A municipal taxpayer
receives no additional services in exchange for paying more.
81. The funding for the Inspector General Program is inequitable to municipal
residents. The Municipalities are being forced to take taxpayer monies away from municipal
programs to fund the Inspector General Program when municipal residents have already paid
their share of ad valorem county taxes.
82. The County should be required to pay for the entire countywide Inspector General
Program as it has done for all other countywide programs approved by referendum.
83. The Municipalities are in doubt as to their rights regarding the payment of the
amounts demanded by the County to fund the countywide Inspector General Program.
84. There is a real and present controversy concerning the lawfulness of the County's
actions regarding the funding for the Inspector General Program.
85. There exists a bona fide actual present and practical need for a declaration
regarding these issues since the County sent invoices to the Municipalities on October 10, 2011,
demanding payment from each Municipality.
WHEREFORE, the Municipalities respectfully request that this Court enter a judgment
declaring that:
a. Municipal residents are entitled to pay a single fee for the Inspector. General's
services, rather than a county fee and a municipal fee for these services;
ILLI
b. The Municipalities shall not be required to pay an additional share of the expenses
for the Inspector General Program over and above the county taxes already
expended for this Program;
C. Any and all expenses relating to the Inspector General Program shall be paid for
solely by the County;
d. Any efforts by the County to charge the Municipalities for the expenses of the
Inspector General Program are unlawful and unenforceable; and
e. The Municipalities are awarded their costs incurred in the prosecution of this
action and are granted such other and further relief as deemed just and proper
under the circumstances.
COUNT IH — DECLARATORY RELIEF
(LACK OF CHARTER AUTHORITY)
86. The Municipalities reallege and incorporate by reference paragraphs 1 through 51
as if fully stated in this count.
87. Pursuant to the Implementing Ordinance (Ordinance No. 2011-009),
Municipalities are required to fund the Inspector General Program via the LOGER System even
though this was not the funding method approved by the voters by their passage of the Ballot
Question in November, 2010.
88. The Ballot Ordinance (Ordinance No. 2010-019) approved by the voters stated
that the Inspector General Program would be funded at minimum in an amount equal to one
quarter of one percent (0.25%) of contracts.
89. The Ballot Ordinance did not mention the LOGER System.
90. None of the past Ordinances dealing with the Office of Inspector General in fact
have mentioned the LOGER System as the funding mechanism for the Program.
91. The first mention of the LOGER System to fund the Inspector General Program
occurred on May 17, 2011, when the BCC adopted the Implementing Ordinance (Ordinance
2011-009). This was more than 6 months after the voters approved the Ballot Question.
17
92. The LOGER System is quite different than the funding method of utilizing an
amount equal to one quarter of one percent (0.25%) of contracts as outlined in the Ballot
Ordinance or its predecessor Ordinances. The LOGER System calculates the amount available
to fund the Inspector General each year based on the County and the Municipalities' actual
expenses rather than on contracts amounts.
93. The actual expenses calculation provides for a much broader funding base than
the one outlined in the Ballot Ordinance or its predecessor Ordinances.
94. Given that the funding mechanism contained in the Implementing Ordinance is so
different from the funding mechanism contained in the Ballot Ordinance that was considered by
the voters, there is no charter authority for the County to require the Municipalities to remit
payment for their share of the Inspector General Program via the LOGER system.
95. The Municipalities are in doubt and uncertain as to what amount (if any) they
should remit to Palm Beach County to pay for their proportionate share of the funding for the
Inspector General because the LOGER System was not mentioned in the Ballot Ordinance, was
not submitted to the voters for approval, and was not mentioned by ordinance until the adoption
of the Implementing Ordinance (Ordinance No. 2011-009) in May, 2011.
96. There is a real and present controversy concerning the lawfulness of the County's
actions regarding the funding for the Inspector General program.
97. There exists a bona fide actual present and practical need for a declaration
regarding these issues since the County sent invoices to the Municipalities on October 10, 2011,
demanding payment from each Municipality.
WHEREFORE, the Municipalities respectfully request that this Court enter a judgment
declaring that:
18
a. There is no charter authority allowing the County to calculate the funding
available to the Inspector General or the Municipalities' proportionate share of
that funding based on the LOGER System;
b. Any efforts by the County to charge the Municipalities for the expenses of the
Inspector General Program via the LOGER System are unlawful and
unenforceable; and
C. The Municipalities are awarded their costs incurred in the prosecution of this
action and are granted such other and further relief as deemed just and proper
under the circumstances.
COUNT IV —DECLARATORY RELIEF
(UNLAWFUL CONFLICT WITH GENERAL LAW)
98. The Municipalities reallege and incorporate by reference paragraphs 1 through 51
as if fully stated in this count.
99. The Florida Constitution authorizes municipalities to "exercise any power for
municipal purposes except as otherwise provided by law." Art. VIII, Sec. 2(b), Fla. Const.
100. Under Chapter 166 of the Florida Statutes, the Municipal Home Rule Powers Act,
Municipalities are expressly empowered to exercise any power for municipal purposes, except
when expressly prohibited by law.
101. Budgeting and the appropriation of taxes collected by municipalities are activities
or powers which may be exercised by municipal corporations under Chapter 166, Florida
Statutes.
102. In particular, Section 166.241, Florida Statutes, provides the statutory framework
for municipalities to adopt and amend their budgets.
103. By requiring the Municipalities to fund the Inspector General Program, the
County is attempting to compel the Municipalities to adopt budgets, which appropriate funds to
carry out the functions of the Program.
19
104. The County imposes an amount on the Miuucipalities to pay each year based on
the funding base and demands that the Municipalities appropriate the necessary monies to cover
this amount without regard to what municipal programs will lose funding or face budget cuts as a
result.
105. Pursuant to the Florida Constitution and the Municipal Home Rule Powers Act,
municipalities retain the exclusive right to appropriate funds as each municipality finds necessary
in responsible operation of municipal government.
106. Pursuant to Fla. Stat. 166.241, only the governing body of a municipality can
appropriate funding to carry out the services and programs for its citizens. The County does not
have the authority to compel the Municipalities to appropriate funds.
107. The County's demand that the Municipalities appropriate funds for the Inspector
General Program is unlawful and unenforceable given that it takes the authority to control
municipal budgets and the appropriation of funds away from the Municipalities.
108. The Municipalities' loss of budgetary control is compounded by the fact that
Section 8.3 of the County's Charter and Section 2-429.1(2) of the Implementing Ordinance allow
the BCC to increase the funding base for the Inspector General Program after a showing of need
for such adjustment.
109. Neither the County's Charter or the Implementing Ordinance permit the
Municipalities to participate in the decision to increase the funding base.
110. The Implementing Ordinance provides that the Municipalities are bound by the
decision of the BCC and must appropriate funds accordingly if the funding base is increased.
111. Section 2-429.1(1)(a) of the Implementing Ordinance also permits the Inspector
General to submit supplemental budget requests to the BCC for approval during the course of a
fiscal year.
9C
112. The Implementing Ordinance does not permit the Municipalities to participate in
the decision on whether to grant the supplemental budget requests even though the
Municipalities will already have approved their budgets for that fiscal year.
113. The Implementing Ordinance provides that the Municipalities are bound by the
decision of the BCC and must appropriate funds accordingly if the supplemental budget requests
are approved.
114. The Municipalities are in doubt as to their rights regarding the lawfulness of the
requirement that they appropriate funds through their budgets to pay the amounts demanded by
the County to fund the Inspector General Program.
115. There exists a bona fide actual present and practical need for a declaration
regarding these issues since the County sent invoices to the Municipalities on October 10, 2011,
demanding payment from each Municipality and the Municipalities have refused to pay these
invoices or have paid under protest.
116. There is a real and present controversy concerning the legality of the County's
actions because the mandatory funding provisions of the County Charter and Implementing
Ordinance unconstitutionally usurps municipal home rule powers and conflicts with general law.
WHEREFORE, the Municipalities respectfully request that this Court enter a judgment
declaring that:
a. The Municipalities shall not be required to pay the expenses of the Inspector
General Program;
b. Any and all expenses relating to the Inspector General Program shall be paid for
solely by the County;
C. Any efforts by the County to require the Municipalities to appropriate funds to
pay for the expenses of the Inspector General Program are unlawful and
unenforceable;
21
d. Section 8.3 of the Charter and subsequent Implementing Ordinance are
unconstitutional as they are in conflict with the powers and duties granted to the
Municipalities under the Florida Constitution and Chapter 166, Florida Statutes;
e. Section 8.3 of the Charter and subsequent Implementing Ordinance are
unconstitutional as they are in conflict with the budgeting powers granted to the
Municipalities pursuant to Chapter 166.0241, Florida Statutes; and
f. The Municipalities are awarded their costs incurred in the prosecution of this
action and are granted such other and further relief as deemed just and proper
under the circumstances.
Dated this1441kday of November, 2011.
Respectfully submitted,
Claudia M. McKenna, City Attorney
CITY OF WEST PALM BEACH
P.O. Box 3366
West Palm Beach, FL 33402
(561) 822-1350
(561) 822-1373 (facsimile)
By. �- siv�� :4�
701-�ouglas N. Yeargin, Assistant City Attorney
Florida Bar No. 777560
Kimberly L. Rothenburg, Assistant City Attorney
Florida Bar No. 0938971
dyeareinna,wob.ora
Attorney for Plaintiff City of West Palm Beach
And
/s/
John C. Randolph, Esquire
Florida Bar No. 12900
Jones, Foster, Johnson & Stubbs, P.A.
P.O. Box 3475
West Palm Beach, FL 33402-3475
Phone(561)659-3000/fax (561)832-1454
jrandoloh(iNones-foster.com
Attorney for Plaintiff Town of Gulf Stream
22
M
Keith W. Davis, Esquire
Florida Bar No. 957577
Corbett and White, P.A.
1111 Hypoluxo Road, Suite 207
Lantana, Florida 33462-4271
Phone (561)586-7116/ fax (561)586-9611
keith(a),corbettandwhite.com
Attorney for Plaintiffs Village of Tequesta,
Town of Palm Beach Shores, and
Town of Mangonia Park
WMI
Pamala Hanna Ryan, City Attorney
Florida Bar No. 996432
City of Rivera Beach Attorney's Office
600 W. Blue Heron Boulevard
Riviera Beach, Florida 33404-4311
Phone (561)845-4069/fax (561)845-4017
cityattomeve,rivierabch.com
Attorney for Plaintiff City of Riviera Beach
And
/s/
Thomas Jay Baird, Esquire
Florida Bar No. 475114
Jones, Foster, Johnson & Stubbs, P.A.
801 Maplewood Drive, Suite 22A
Jupiter, Florida 33458-8821
Phone(561)650-8233/fax (561)746-6933
tbaird(a), iones-foster.com
Attorney for Plaintiffs Town of Jupiter
and Town of Lake Park
23
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